"When fascism comes to America, it will be wrapped in the flag and carrying the cross."
-- Sinclair Lewis

Monday, May 04, 2009

Corrupt Military Contracting-- Still The Crime Of The Century

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"KBR is a sociopathic organization that turns lies into profit. It deserves a corporate death penalty."-Congressman Alan Grayson

More than most members of Congress, Grayson knows exactly what KBR is and what they do and why they've earned such a harsh judgment from investigators who have looked into them. Before Grayson was elected to Congress to represent a central Florida district centered in Orlando, he was busy suing war profiteers. His successes are legendary, as documented in a Vanity Fair feature, "The People vs. The Profiteers," from 2007 that starts like this:

Americans working in Iraq for Halliburton spin-off KBR have been outraged by the massive fraud they saw there. Dozens are suing the giant military contractor, on the taxpayers’ behalf. Whose side is the Justice Department on?

On first meeting him, one might not suspect Alan Grayson of being a crusader against government-contractor fraud... Grayson spends most of his days and many of his evenings on a lonely legal campaign to redress colossal frauds against American taxpayers by private contractors operating in Iraq. He calls it “the crime of the century.”

His obvious adversaries are the contracting corporations themselves-- especially Halliburton, the giant oil-services conglomerate where Vice President Dick Cheney spent the latter half of the 1990s as C.E.O., and its former subsidiary Kellogg, Brown & Root, now known simply as KBR. But he says his efforts to take on those organizations have earned him another enemy: the United States Department of Justice.

Over the past 16 years, Grayson has litigated dozens of cases of contractor fraud. In many of these, he has found the Justice Department to be an ally in exposing wrongdoing. But in cases that involve the Iraq war, the D.O.J. has taken extraordinary steps to stand in his way. Behind its machinations, he believes, is a scandal of epic proportions-- one that may come to haunt the legacy of the Bush administration long after it is gone.

That time is now, as the NY Times reported today. Yes, Bush and his depraved regime are gone-- but so are untold billions of taxpayer dollars-- and they didn't just vanish into thin air. The connection between the Bush Family and KBR, a spin-off of the Houston-based Dubai-based Halliburton, once run by Dick Cheney, will be judged by historians as one of the actual causes of the Iraq War, the same way historians credit munitions manufacturers with having contributed to what came to be known as World War I. Halliburton and KBR are at the bottom of an effort by modern day robber barons to build generational wealth by massively ripping off the American public. The War Tapes, the first documentary of the Iraq War produced by U.S. soldiers who fought in it, mentions, for example, how Halliburton charged American taxpayers, with the Bush Regime's encouragement, $28 each for the disposable picnic plates given to the soldiers in the mess hall that their meals are served on. The slop they served on the plates cost more. And in a letter to Defense Secretary Robert Gates on Friday, Senators Claire McCaskill (D-MO) and Susan Collins (R-ME), respectively the chair and ranking member of the contracting oversight subcommittee of the Senate Homeland Security and Governmental Affairs Committee want to know why the Pentagon has collected the $100 million in known, admitted overcharges and why the same monopolistic practices that saw KBR and rake in $31.3 billion under its partners in the Bush Regime.

To the irritation of KBR’s critics, the Army has generally upheld the bills the company has submitted to the military, even when the Pentagon’s own auditors have questioned the amounts. But the argument that the Army was overcharged appears to be more clear-cut in the cases of several former KBR officials convicted of accepting bribes and kickbacks.

In those cases, the Army asked KBR to perform a certain task under the Logcap contract, like buying living trailers or building a dining facility, and the KBR officials found subcontractors in the region to carry out the actual work. The officials took bribes to steer the work toward subcontractors who were not the low bidders, or simply inflated the worth of the contracts once they had been awarded.

In the contracts handled by just one of those officials, Stephen Lowell Seamans, who pleaded guilty to bribery and conspiracy in March 2006, Pentagon auditors quickly found potential excess profits by a Kuwaiti subcontractor of $49.8 million, or 76 percent, “as a result of Mr. Seamans’s fraudulent activities,” the senators wrote.

Of $306 million in tainted contracts, at least $100 million of the charges appeared to be unjustified, wrote the senators.

And people who have looked into war profiteering in Iraq unanimously agree that that's just small change compared to what was actually ripped off. Today the Wartime Contracting Commission is meeting in Washington. At a February meeting Senator McCaskill, didn't shock anyone when she referred to the contracting in Iraq as "a massive failure. We have failed our military, and we have failed the American people." Government agencies report:

• A lack of oversight has led to widespread abuse among contractors who have bilked the government out of millions of dollars.

• There is no accurate count of contractor personnel in the war theater, just as there is no uniform system to track workers killed or injured.

• Private contractors' legal status is different from that of U.S. government employees; military leaders have less authority over contractors than over military or civilian subordinates.

• Criminal cases and civil lawsuits involving contractors, which are not tracked by U.S. agencies, routinely raise political and jurisdictional questions.

Crooked contractors and the Bush Regimistas who enabled them and took their bribes better hope this doesn't wind up going over to the House. Let's face it; Collins may even be complicit and McCaskill... what's she going to do? Send a tweet? If this gets taken up by the House, where members like Grayson, as well as former military officers like Joe Sestak, Patrick Murphy and Eric Massa-- not to mention Armed Services Committee member Carol Shea Porter-- know what this is all about and don't mind upsetting some apple carts to get to the bottom of it, the "crime of the century" prediction is going to play out on cable TV. “Some folks," said Eric Massa (D-NY), an Annapolis grad and former officer on the USS New Jersey, "might think that $100 million of missing money is not a lot, I'm not one of them. During the past eight years we did not hold contractors accountable, but that's going to change. I join with Senators Collins and McCaskill in calling for responsibility and accountability in ensuring our tax dollars are used properly. I will not stay silent when the American taxpayer is being ripped off and that is exactly what we're talking about.”

Retired admiral Joe Sestak (D-PA) is the highest ranking military officer to have ever served in the House. Like Carol Shea-Porter and Eric Massa, he serves on the House Armed Services Committee. He may or may not run for the Senate next year. But whatever he does, it doesn't bode well for the criminal contractors who have been ripping off the taxpayers. This morning he told us that "There is probably no more important issue than to correct what has been a failure of accountability in government for some time. I learned in the military that leaders are not only responsible for their actions, but are accountable for them. The failure to ensure accountability for overpayments to KBR and other companies does nothing except reinforce the viewpoint that our government fails to provide accountable leadership.”

The BBC made a short film about the scandal which, predictably, got more play in Europe than in the U.S. If you haven't seen it already, please take a look:

Thanks for a great post. I wouldn't mind seeing all the authors of this crime brought to justice. Maybe, after Obama gets over his growing pains and the economy recovers a bit, he'll do some things that really make us take notice - about this and about the torture.